The Daily Reckoning December 19th
There are some authors (I could count them on one hand) who have a transforming effect on the human mind.
My list of people who changed me fundamentally would include H.L. Mencken, Murray Rothbard, Ayn Rand, Noam Chomsky, and Arthur Schopenhauer.
After reading Totally Incorrect, this week’s e-book download in the Laissez Faire Club, I would add the name Doug Casey to the list.
The ebook releases on Friday in the Club, free to all members. You can claim your physical copy of the book by clicking here.
I can see why his book Crisis Investing became such a huge best-seller back in 1979. It’s not his ideas about investing that matter the most. It’s his completely contrarian way of looking at the world and his willingness to think out of the box. It’s his bravery and creativity that make him compelling. Very few writers achieve this in our time.
As you read such authors, the feeling is nearly physical. Their flaunting of civic convention creates delight and enlightenment, but also discomfort. You wonder as you read: Are people really allowed to think that? Will I get in trouble if I agree?
From time to time, you are outraged. This is good. It proves you are engaged. Our brains can take it. In fact, we need it.
Following such exposure to civic heresy, you realize that things look different to you. Even if you resist, the ideas were planted in your brain. They keep coming back as you read the news, watch events unfold, and process the barrage of information that slams our brains every day. The voice sticks. It rings in your ears. You are slowly convinced. In time, you realize something: This radical thinker is my benefactor. He changed me.
It is never enough to encounter such an author once in a lifetime. We need to revisit them every few years or even every few months. We need to do this for the same reason we have to plunge our sinks every once in awhile. Normal use of the brain introduces muddled thinking and conventional habits of mind that are contrary to truth and reality.
One way to think about such writers is by analogy to computer code. Every piece of software deals with the problem of old and useless code that makes it run more slowly and inefficiently than it should. Such code is called cruft. It builds up over time. The cruft has to be cleaned for the new code to do all it can do. It’s one of the challenges a programmer faces.
As with managing a kitchen, you have to clean while you cook.
In the world of ideas, cruft is the buildup that occurs in your brain just from being part of public culture. We hear only two sides on every political debate (gun control, foreign policy, taxation, government spending) and it does not automatically occur to us that the debate is artificially narrow. We put these conventional assumptions in our heads even without thinking about them. They build over time.
Casey is the one-man cleanup crew. You can agree or disagree with what he says. Doesn’t matter. What matters is that he shocks the brain out of its stupor and fires up new thoughts and new ways of looking at the world. I happen to think he is mostly right in the way he views the world. It’s the exposure alone that is valuable, even if you end up rejecting his ideas (or so you think, until you wake up one day agreeing with him).
Totally Incorrect is better than a book of prose. It is a book of interviews, topic by topic. This way, the reader is able to catch him in the most candid way possible. I know from my own conversations with him — just in passing at conferences — that he has a way of formulating things that is absolutely unforgettable. This entire book of 350 pages does exactly this on every important topic of our time.
In Doug’s book you’ll learn:
The best way to rob a bank..and you don’t need a gun;
Whether you should seek the quality over quantity of life;
What you can do with your money that is better than getting a $100,000 MBA;
What things are so critical that government should never be trusted with;
Whether it is evil or moral or avoid taxes;
Why pirates and smugglers are humanity’s benefactors;
Why war is great for governments but terrible for the rest of us;
Why the jails are filling up with good guys and the bad guys are running the country;
Why we were better off when fist fights would break out in Congress;
Why you should consider getting out of the country ASAP;
The best way to fight official corruption in government (hint: no officials, no corruption);
Why America has embraced the “deadly combination” of “Nordic efficiency and American neopuritanism.”
The book allows you to experience such thoughts in the context of a very civil conversation, so you can see how his mind works. It is brilliant, and it inspires brilliance. Someone like Casey comes along very rarely. He’s been called the only viable contender for Mencken’s legacy. I can see the point. But I would go further to say that he is a leading intellectual light in the anarchist tradition.
You can live a life in the cruft of old code or you can clean it up and start fresh, using Casey as the cleanup crew.
Original article posted on Laissez-Faire Today
Lakshmi Mittal is the head of the largest steelmaker in the world, ArcelorMittal. It is a company he built up through many savvy acquisitions. As a result, Mittal is one of the richest men in the world. He also has a global perspective second to none, having run businesses in many different countries.
So when he said he may invest in a steel plant in Alabama, I listened. “Mittal Upbeat on U.S. Growth Prospects,” a Financial Times headline reads. This is man who could put a steel plant almost anywhere in the world. For him to say the U.S. is among the most appealing is saying something…
In an interview with that paper, Mittal said: “There’s an improved picture for housing starts, and automotive demand seems to be rising. If you look at the U.S. economy in general, then you see a good story.”
The FT sums up:
“U.S. manufacturing is poised to reap the benefits of cheaper energy, propelling the world’s largest economy into a growth phase, according to Lakshmi Mittal… [He] said that the new shale-based deposits in the region made him ‘much more optimistic’ than he was two years ago about the prospects for the U.S. economy.”
These are themes we have touched on before. Just before Thanksgiving, I wrote a piece to you called “Four Reasons To Remain Optimistic,” which talked about good stories developing in the U.S. economy. I got quite a few emails pushing back on that idea.
On my recent trip to Nicaragua, I spoke at my publisher’s Rancho Santana Sessions conference. I trotted out the more optimistic theme there too. I talked about the ongoing housing and banking recovery. I mentioned the energy revolution and nascent manufacturing revival. I got push back in Nicaragua, too. Lots of people seem to want to believe the country is screwed and, well, forget it.
Investors don’t think that way. No one ever created a fortune thinking that way. There are always opportunities. Always.
Now, I want to be careful here, because it is easy to get pinned as some sort of flag-waving idiot that doesn’t get what is going on. I get it. I get the debt levels, the fiscal crisis, the creeping socialism (and creeping fascism) and all the rest. Still, to use that as an excuse for not investing is, as oil tycoon Paul Getty once said, “only an excuse for not trying.”
We have been through worse.
Take the 1950s. I’ve been reading The Best of I.F. Stone. Izzy Stone (1907-89) was a great journalist and editorialist most famous for his influential newsletter, I.F. Stone’s Weekly. In the 1950s, the threat of nuclear war hung over the landscape like a bright moon on a starless night, and Stone has several editorials on the issue. At the time, mainstream papers talked about what to do if such an attack occurred. U.S. News & World Report carried a story, “If Bombs Do Fall.” Life magazine ran a story, “How You Can Survive Fallout.” It must’ve been pretty tough to think about investing with all that going on.
We could roll back further, let’s say to 1939. What a disaster the world looked like then. War in Europe. A Great Depression at home. Yet as we now know, many fortunes had their seeds in the ground before or during this time. Stone’s editorials, which span three decades, show how this ball of ours has always been full of serious troubles. And yet…
During my talk, I quoted from an entertaining little book called The Very Very Rich and How They Got That Way by Max Gunther. I like it for its pugnacious attitude toward those wet blankets who want to quash any idea of getting rich. I like Gunther’s punchy prose, though his book is a superficial book on many levels. Anyway, Gunther writes:
“The men in this gallery… made their colossal fortunes in our own economic era or in recently phased-out eras that were not grossly different from our own. Each took the economic environment as it existed in his day and instead of letting it walk on him as most of us do, he grabbed it by the neck and beat it into submission… The supremely wealthy have always done that and always will. No matter what the environment was like, some men have figured out how to beat it. There is, it turns out, always a way.”
Keep in mind Gunther published this book in 1972 — which again, was another one of those periods with lots of macro worries. And Gunther makes a good point here why you want to invest with those proven owner-operators I love to talk about so much. The owner-operators are the ones who tend to figure out a way. They are the ones you want to invest alongside. (It doesn’t work all the time, of course. Nothing does. But I’d rather play the game this way than invest in some faceless company run by suits who own no stock save what they get through stock options.)
There are always big problems, too. But if you never play the game, you have no chance. My friend Eric Fry, who is co-editor of The Daily Reckoning and also spoke in Nicaragua, used the analogy that investment ideas are like trains — “They arrive and they depart,” as he said. Some arrive on time, some late. Some never arrive, or depart.
I extended that metaphor by saying that there are crowded trains and nearly empty trains. You get better deals traveling on less crowded trains and get where you want to go all the same. I tried to encourage people to take the less crowded trains.
I’m not saying life and investing are going to be easy. (And I’m not bullish on the stock market overall, only on specific opportunities. I’m agnostic on the market as a whole.) In the end, there is no escaping another crisis of some sort.
Timing is the thing. And if you take the long enough view, the survival rate for everything drops to zero. At some point, the sun will burn out and that will end the story here for good. But I’ve never seen the point of taking such an apocalyptic — and paralyzing — worldview.
I am reminded of that witty investor Marty Sosnoff. “This is like Venice slipping gently but proudly into the mud over 400 years,” he wrote. “In the end, the mud wins, but there have been some memorable masked balls in between.” (This is from Humble on Wall Street, a true pleasure to read and one of my favorite finance books). Or as the great speculator Jesse Livermore once said: “It’s true you can’t take it with you, but you can sure as hell use it until you go.”
So to finish where I began: If you told me I could pick only one country to invest in, I’d pick the U.S. (Fortunately, I don’t have to make that choice, and there are plenty of wonderful places to invest overseas, too, as I’ve written much about.) I’m with Lakshmi Mittal. There are some good stories emerging here in the US of A, despite the problems.
Original article posted on Daily Resource Hunter
Investing In The U.S. — Still The Best Of The Bunch… appeared in the Daily Reckoning. Subscribe to The Daily Reckoning by visiting signup for an Agora Financial newsletter.